Fin 202- Group Assignment

p c l h n t Ms h m Le H S ei t a k o . a i a a P n frh ligu t d t i po c o e n s o o hs rj t p e put back of subject field Excutive drumhead .. P. 3 Business propose. P. 3 Vision. P. 3 Main runP. 3 Evaluating the food market. P. 4 Financial Plan.. P. 5 sign investing.. P. 5 Interest earningsP. 6 Wages Payment P. 6 Variable follow.. P. 7 heady embody per course of instruction for change and Admin activities. P. 7 Expected do of customers. P. 7 count expense. P. 8 bell of for each one servicesP. 8 revenue enhancement PlanP. shekels & termination Plan.. P. 9 carve up even for each categoryP. 9 Cash flow& Analysis.. P. 10 Conclusion.. P. 10 germ.. P. 11 Excutive summary In order to bring customers a newly service, especi on the wholey for the female customers, our group decided to bring a new project- speak legal community Paradise. Nowadays, need of making a handmade taproom or chocolate of female customers for their lovers, friends or families is very high but not everyone has generous cash to defile for herself an expensive oven or barroom cooking tools. Our project is created to solve this problems.We endure a service for customer to hire our kitchen with undecomposed machines & tools of legal community cooking to made a cake or chocolate. We similarly provides ingridiants in Shop of cake ingridients in 1st floor and Class of learning how to compensate a cake 2 times/week. With this advantages and professional of this service, we believe we pass on achieve the highest expectation from customer. To be the counterbalance comp either provide service in hiring saloon making machines and Tools, legal community paradise have high grow put and fullfill the need of customers about the cake making-which means profitable and deserve to be invested.Business think Vision customers Focus High quality services Grown up by 100% in the out proceeds 5 classs fashioning lettuce since 2nd or 3rd stratum operating Main Services 1 st Floor Shop of Cake ingridientswhere you buttocks find any kinds of cake ingridients and tools. 2nd & 3rd Floor Cake paradises Kitchen for hiring with fullfill cake making s equipment and tools. It is call DIY service- With VND120,000 for 3 hours, you forget have full of cake making equipment and tools to make your ideal cake for your lovers.Every Friday and Sunday, we have classes of making cake, which are teached by cookers who are very experienced in making cakes- With VND400,000 for a 4-hour class, you will learn to make 3 kinds of delicious cakes or chocolate in the world, it is a best price for any learners. Evaluating Market Instead of going to a cake shop and buy for the lovers or family, friends a cake, recently, many girls and women want to make for her relatives a cake by herself.This gift is unique and much pregnant to her relatives and in other way, it prove the womenliness and caringful of who made it. It now creates a trend not only in making cake but also in m aking handmade stuffs. We notice that there is a lack for cake handmade market. We can easily find handmake s materitals and tools in the market as paper, stuff,.. with a quite cheap price. But in making cake, the ingridients, especially the cake making equipments are very expensive.Not everyone has enough money to buy for herself a expensive oven or cooking tools. When in the market, there are many providers provides for other handmade things but there arent a supplier which provide hiring cake making machine & tools although the demand of it is very high. Seeing this, our group decided to bring Cake paradise service to customer. Financial Plan Innital Investment We plan the project will be implemented in 5 years For the long-term assets, time for full depreciation is 5 years. No.Tool& Equipment majuscule disbursal 1st Floor -Shop for Cakes ingridients Good shelf Refrigerator Table Electronic Cash Regristor woo of Installment& Decoration 2nd & 3rd Floor- can for DIY and learne dness Kitchen cupboard Oven Refrigerator Hand-mixer Blender Gas cooker Fan Table greet of Installment & Decoration 4th Floor - mightiness Destop & PC Phones Printer Office Table and chairs Cost of Installment& Decoration Working capital for the zero year Uniform for Staff Training course for staff Tools for the kitchen Tools for the office CashINITAL coronation amount of money Cost per Unit dictatorial Cost 148,500,000 17,800,000 4,800,000 3,500,000 1,000,000 3,500,000 5,000,000 99,900,000 30,000,000 18,000,000 26,000,000 2,800,000 1,100,000 4,000,000 4,000,000 4,000,000 10,000,000 30,800,000 20,000,000 800,000 3,000,000 5,000,000 2,000,000 45,000,000 2,000,000 3,000,000 5,000,000 5,000,000 30,000,000 193,500,000 29,700,000 1 1 1 600,000 3,500,000 1,000,000 3,500,000 5,000,000 15,000,000 3,000,000 13,000,000 700,000 550,000 2,000,000 1,000,000 1,000,000 10,000,000 10,000,000 800,000 3,000,000 1,000,000 2,000,000 200,000 500,000 TOTAL DEPRECITAION 2 6 2 4 2 2 4 4 2 1 1 5 10 6 In terest Payment socio-economic class Quarter 1 I II tercet IV 2 I II tercet IV 3 I II III IV 4 I II III IV 5 I IIIII IV INTEREST PAYMENTS (VND) Beginning Balance Principal Payment Interest Payment Total Payment Total Payment/twelvemonth Ending Balance 80,000,000 4,000,000 2,400,000 6,400,000 24,880,000 76,000,000 76,000,000 4,000,000 2,280,000 6,280,000 72,000,000 72,000,000 4,000,000 2,160,000 6,160,000 68,000,000 68,000,000 4,000,000 2,040,000 6,040,000 64,000,000 64,000,000 4,000,000 1,920,000 5,920,000 22,960,000 60,000,000 60,000,000 4,000,000 1,800,000 5,800,000 56,000,000 56,000,000 4,000,000 1,680,000 5,680,000 52,000,000 52,000,000 4,000,000 1,560,000 5,560,000 48,000,000 48,000,000 4,000,000 1,440,000 5,440,000 21,040,000 44,000,000 44,000,000 4,000,000 1,320,000 5,320,000 40,000,000 40,000,000 4,000,000 1,200,000 5,200,000 36,000,000 36,000,000 4,000,000 1,080,000 5,080,000 32,000,000 32,000,000 4,000,000 960,000 4,960,000 19,120,000 28,000,000 28,000,000 4,000,000 840, 000 4,840,000 24,000,000 24,000,000 4,000,000 720,000 4,720,000 20,000,000 20,000,000 4,000,000 600,000 4,600,000 16,000,000 16,000,000 4,000,000 480,000 4,480,000 17,200,000 12,000,000 12,000,000 4,000,000 360,000 4,360,000 8,000,000 8,000,000 4,000,000 240,000 4,240,000 4,000,000 4,000,000 4,000,000 120,000 4,120,000 pure tones Debt of VND80,000,000 from bank, maturity of 5 years, interest judge 12% Interest is paid in from the first month, principal requital is incurred at once a quarter Wages paymentJob title 1 Director 2 Secretary 3 Accountant 4 gross revenue ancillary 5 Cooking teacher 6 Securities Total Quantity 1 1 1 6 2 2 WAGE PAYMENTS (VND) class 1 social class 2 72,000,000 75,600,000 42,000,000 44,100,000 48,000,000 50,400,000 144,000,000 151,200,000 96,000,000 100,800,000 48,000,000 50,400,000 450,000,000 472,500,000 yr 3 79,380,000 46,305,000 52,920,000 158,760,000 105,840,000 52,920,000 496,125,000 Year 4 83,349,000 48,620,250 55,566,000 166,698,000 111,132,000 55,566,000 520,931,250 Year 5 87,516,450 51,051,263 58,344,300 175,032,900 116,688,600 58,344,300 546,977,813 Notes 1. Wages of Director, Secretary, Accountant, Sales Assistant, Securities are included in merchandising and Admin Fixed expense each year 2. Wages of cooking teacher is included as Direct Labor for Learning Services 3. Wages growth rate is 5% each year Variable courtWe have three services in this project, in general, to estimate the variable quantity cost, we estimate the variable cost beyond the number of customers we service. Services Included obtain DIY Learning Bag Tool packgage 1 Tools package 2 Ingridients Using CPs kitchen Using CPs tools instructor Services Included Bag Tool package 1 Tool package 2 Ingridients Using CPs kitchen (gas, water, electricity cost,) Using CPs kitchen s tools Teacher Total versatile COST PER CUSTOMER shop DIY 500 3,500 Learning 500 3,500 15,000 3,000 10,000 500 3,500 15,000 50,000 3,000 10,000 50,000 132,000 4,000 32,000 Fixed co st per year for Selling and Admin activitiesFIXED COST PER stratum FOR ADMINSTRATIVE & sell ACTIVITIES Detail Per month Per year Internet bill 250,000 3,000,000 Electricity bill 1,500,000 18,000,000 Water bill 200,000 2,400,000 Phoning bill 200,000 2,400,000 Advertising exp 6,000,000 Other exp 1,000,000 12,000,000 43,800,000 Expected number of customers year 1 Shopping DIY Learning Total judge NUMBER OF CUSTOMER year 2 year 3 year 4 3500 4550 5460 2920 3796 4555 768 998 1198. 1 7,188 9,344 11,213 year 5 5733 4783 1258 11,774 6020 5022 1321 12,363 We assume that because this is a new services which havent existed in the market so it will have a numerous of customers The growth rate will be 30%, 10% and 5% for the year of 2, 3, 4 and 5 respectively , after the services enter the market. Total expenseYear 0 Total Variable costs Shopping DIY Learning Total Fixed costs Wages Depreciation House Renting Fixed cost of sell and admin Intersest payment Total cost TOTAL EXPENSE Year 1 Year 2 Year 3 Year 4 Year 5 208,816,000 271,460,800 325,752,960 342,040,608 14,000,000 18,200,000 21,840,000 22,932,000 93,440,000 121,472,000 145,766,400 153,054,720 101,376,000 131,788,800 158,146,560 166,053,888 512,380,000 354,000,000 29,700,000 60,000,000 43,800,000 24,880,000 721,196,000 528,160,000 371,700,000 29,700,000 60,000,000 43,800,000 22,960,000 799,620,800 544,825,000 390,285,000 29,700,000 60,000,000 43,800,000 21,040,000 870,577,960 562,419,250 409,799,250 29,700,000 60,000,000 43,800,000 19,120,000 904,459,858 359,142,638 24,078,600 160,707,456 174,356,582 580,989,213 430,289,213 29,700,000 60,000,000 43,800,000 17,200,000 940,131,851 Price of each servicesCustomer Year 1 Shopping DIY Learning Year 2 Shopping DIY Learning Year 3 Shopping DIY Learning Year 4 Shopping DIY Learning Year 5 Shopping DIY Learning 3,500 2,920 768 4,550 3,796 998 5,460 4,555 1,198 5,733 4,783 1,258 6,020 5,022 1,321 Variable Cost 14,000,000 93,440,000 101,376,000 18,200,000 121,472,000 131,78 8,800 21,840,000 145,766,400 158,146,560 22,932,000 153,054,720 166,053,888 24,078,600 160,707,456 174,356,582 Fixed cost Toatal cost Cost per customer Average cost in 5 year 512,380,000 51,238,000 65,238,000 18,639 15,138 230,571,000 324,011,000 110,963 92,074 230,571,000 331,947,000 432,223 360,406 528,160,000 52,816,000 71,016,000 15,608 237,672,000 359,144,000 94,611 237,672,000 369,460,800 370,053 544,825,000 54,482,500 76,322,500 13,978 245,171,250 390,937,650 85,822 245,171,250 403,317,810 336,637 562,419,250 56,241,925 79,173,925 13,810 253,088,663 406,143,383 84,915 253,088,663 419,142,551 333,186 580,989,213 58,098,921 82,177,521 13,652 261,445,146 422,152,602 84,059 261,445,146 435,801,728 329,932 Shopping DIY Learning Original Cost plus 1% Final Price Note We calculate the total cost of a service and base on it to estimate the price 15,289 17,000 For the Shopping services, the price is the average profit we cook from each shopping bill 92,995 120,000Assume that the shop dont have inventory because the goods are directly taken from agent 364,010 400,000 Revenue PlanYear 0 Shopping Customer Profit/bill DIY Customer Price Learning Customer Price Total Growth rate of revenue (%) Year 1 EXPECTED taxation Year 2 Year 3 Year 4 Year 5 59,500,000 77,350,000 92,820,000 97,461,000 102,334,050 3,500 4,550 5,460 5,733 6,020 17,000 17,000 17,000 17,000 17,000 350,400,000 455,520,000 546,624,000 573,955,200 602,652,960 2,920 3,796 4,555 4,783 5,022 120,000 120,000 120,000 120,000 120,000 307,200,000 399,360,000 479,232,000 503,193,600 528,353,280 768 998 1,198 1,258 1,321 400,000 400,000 400,000 400,000 400,000 717,100,000 932,230,000 1,118,676,000 1,174,609,800 1,233,340,290 30 20 5 5 Because this is a on the whole new services, so after the first year, the number of customers maturation sharply in the 2nd and 3rd year, but in the 4th and fifth year when Cake paradise (C has the competitor, ( who enter the market to join this segment), the growth rate of CP increase slightly at 5%. Profit & Loss PlanYear 1 Revenue Variable Cost Contribute Margin Fixed Cost Earning before Tax Tax Earning after tax PROFIT AND qualifying invention Year 2 Year 3 Year 4 Year 5 717,100,000 932,230,000 1,118,676,000 1,174,609,800 1,233,340,290 208,816,000 271,460,800 325,752,960 342,040,608 359,142,638 508,284,000 660,769,200 792,923,040 832,569,192 874,197,652 512,380,000 528,160,000 544,825,000 562,419,250 580,989,213 (4,096,000) 132,609,200 248,098,040 270,149,942 293,208,439 28% 28% 28% 28% 28% (4,096,000) 95,478,624 178,630,589 194,507,958 211,110,076 We can regard that in the first year, because this is a new service and it needs time for the customers to know and have the habit to use this service, so the earning after tax for the first year is negative. After the first year,the number of customers who know and use Cake Paradise service increase (beyond word of mouth), the earning after tax for the 2nd, 3rd, 4th, 5th increase sharply. Break even fo r each yearYear 1 CM CM unit CM Ratio Break even tier Break even revenue Safety of margin 508,284,000 70712. 9 0. 7088 7,246 722,878,741 (5,778,741) BREAK EVEN Year 2 Year 3 Year 4 Year 5 660,769,200 792,923,040 832,569,192 874,197,652 70712. 9 70712. 9 70712. 9 70712. 9 0. 7088 0. 7088 0. 7088 0. 7088 7,469 7,705 7,954 8,216 745,141,567 768,652,973 793,475,388 819,674,364 187,088,433 350,023,027 381,134,412 413,665,926 Cash flow We have, cost of capital was calculated by WACC assumption ( ( ) ) Year 0 Revenue run Expense EBITDA D&A EBIT (1- Tax) NOPAT CFOP Capital expense Working capital Add W. C Free Cash flow Payback period Cost of capital NPV IRR MIRRCASH FLOW Year 1 Year 2 Year 3 Year 4 Year 5 717,100,000 932,230,000 1,118,676,000 1,174,609,800 1,233,340,290 691,496,000 769,920,800 840,877,960 874,759,858 910,431,851 25,604,000 162,309,200 277,798,040 299,849,942 322,908,439 29,700,000 29,700,000 29,700,000 29,700,000 29,700,000 (4,096,000) 132,609,200 248,098,040 270,149,94 2 293,208,439 0. 72 0. 72 0. 72 0. 72 0. 72 (4,096,000) 95,478,624 178,630,589 194,507,958 211,110,076 25,604,000 125,178,624 208,330,589 224,207,958 240,810,076 (148,500,000) (45,000,000) (193,500,000) 2. 5 15. 30% 277,726,609 54% 30. 39% (45,000,000) 25,604,000 (58,500,000) (13,500,000) 111,678,624 (70,200,000) (11,700,000) 196,630,589 (73,710,000) (3,510,000) 220,697,958 (77,395,500) (3,685,500) 314,520,076 The Payback Period isConclusion 1. 2. 3. 4. The project completely has the ability of reaching the break-even slur from the first year. Payback period is nearly 2. 5 years, a very appropriate period in the whole process of 5 years. NPV is a positive rime and IRR is at 54%, much more higher than the cost of capital. MIRR is at 30. 39%, a high figure. ? Although the initial investment is quite small, all the figures higher up have proved that this project is profitable and promises to bring high profit. Reference Fundamental of corporate financial Book Vatgia. vn Kitchenart. wordpress. com Nguyenkim. vn Special thank to Ms. Pham spleen Ha to helps us to do this projectFin 202- Group Assignment p c l h n t Ms h m Le H S ei t a k o . a i a a P n frh ligu t d t i po c o e n s o o hs rj t p e Table of content Excutive Summary .. P. 3 Business Plan. P. 3 Vision. P. 3 Main ServicesP. 3 Evaluating the market. P. 4 Financial Plan.. P. 5 Initial Investment.. P. 5 Interest PaymentP. 6 Wages Payment P. 6 Variable cost.. P. 7 Fixed cost per year for Selling and Admin activities. P. 7 Expected number of customers. P. 7 Total expense. P. 8 Price of each servicesP. 8 Revenue PlanP. Profit & Loss Plan.. P. 9 Break even for each yearP. 9 Cash flow& Analysis.. P. 10 Conclusion.. P. 10 Reference.. P. 11 Excutive summary In order to bring customers a new service, especially for the female customers, our group decided to bring a new project- call Cake Paradise. Nowadays, need of making a handmade cake or chocolate of female customers for their lovers, friends or families is very high but not everyone has enough money to buy for herself an expensive oven or cake cooking tools. Our project is created to solve this problems.We provide a service for customer to hire our kitchen with full machines & tools of cake cooking to made a cake or chocolate. We also provides ingridiants in Shop of cake ingridients in 1st floor and Class of learning how to make a cake 2 times/week. With this advantages and professional of this service, we believe we will achieve the highest expectation from customer. To be the first company provide service in hiring Cake making machines and Tools, Cake paradise have high grow rate and fullfill the need of customers about the cake making-which means profitable and deserve to be invested.Business plan Vision Customers Focus High quality services Grown up by 100% in the first 5 years Making profits since 2nd or 3rd year operating Main Services 1st Floor Shop of Cake ingridientswhere you can find any kinds of cake ingridients and tools. 2nd & 3rd Floor Cake paradises Kitchen for hiring with fullfill cake making s equipment and tools. It is call DIY service- With VND120,000 for 3 hours, you will have full of cake making equipment and tools to make your ideal cake for your lovers.Every Friday and Sunday, we have classes of making cake, which are teached by cookers who are very experienced in making cakes- With VND400,000 for a 4-hour class, you will learn to make 3 kinds of delicious cakes or chocolate in the world, it is a best price for any learners. Evaluating Market Instead of going to a cake shop and buy for the lovers or family, friends a cake, recently, many girls and women want to make for her relatives a cake by herself.This gift is unique and more meaningful to her relatives and in other way, it prove the womenliness and caringful of who made it. It now creates a trend not only in making cake but also in making handmade stuffs. We notice that there is a lack for cake handmade market. We can easily find ha ndmake s materitals and tools in the market as paper, stuff,.. with a quite cheap price. But in making cake, the ingridients, especially the cake making equipments are very expensive.Not everyone has enough money to buy for herself a expensive oven or cooking tools. When in the market, there are many suppliers provides for other handmade things but there arent a supplier which provide hiring cake making machine & tools although the demand of it is very high. Seeing this, our group decided to bring Cake paradise service to customer. Financial Plan Innital Investment We plan the project will be implemented in 5 years For the long-term assets, time for full depreciation is 5 years. No.Tool& Equipment Capital Expense 1st Floor -Shop for Cakes ingridients Good shelf Refrigerator Table Electronic Cash Regristor Cost of Installment& Decoration 2nd & 3rd Floor- Place for DIY and Learning Kitchen cupboard Oven Refrigerator Hand-mixer Blender Gas cooker Fan Table Cost of Installment & Decorat ion 4th Floor -Office Destop & PC Phones Printer Office Table and chairs Cost of Installment& Decoration Working capital for the zero year Uniform for Staff Training course for staff Tools for the kitchen Tools for the office CashINITAL INVESTMENT Quantity Cost per Unit Total Cost 148,500,000 17,800,000 4,800,000 3,500,000 1,000,000 3,500,000 5,000,000 99,900,000 30,000,000 18,000,000 26,000,000 2,800,000 1,100,000 4,000,000 4,000,000 4,000,000 10,000,000 30,800,000 20,000,000 800,000 3,000,000 5,000,000 2,000,000 45,000,000 2,000,000 3,000,000 5,000,000 5,000,000 30,000,000 193,500,000 29,700,000 1 1 1 600,000 3,500,000 1,000,000 3,500,000 5,000,000 15,000,000 3,000,000 13,000,000 700,000 550,000 2,000,000 1,000,000 1,000,000 10,000,000 10,000,000 800,000 3,000,000 1,000,000 2,000,000 200,000 500,000 TOTAL DEPRECITAION 2 6 2 4 2 2 4 4 2 1 1 5 10 6 Interest Payment Year Quarter 1 I II III IV 2 I II III IV 3 I II III IV 4 I II III IV 5 I IIIII IV INTEREST PAYMENTS (VND) Beginning Bal ance Principal Payment Interest Payment Total Payment Total Payment/Year Ending Balance 80,000,000 4,000,000 2,400,000 6,400,000 24,880,000 76,000,000 76,000,000 4,000,000 2,280,000 6,280,000 72,000,000 72,000,000 4,000,000 2,160,000 6,160,000 68,000,000 68,000,000 4,000,000 2,040,000 6,040,000 64,000,000 64,000,000 4,000,000 1,920,000 5,920,000 22,960,000 60,000,000 60,000,000 4,000,000 1,800,000 5,800,000 56,000,000 56,000,000 4,000,000 1,680,000 5,680,000 52,000,000 52,000,000 4,000,000 1,560,000 5,560,000 48,000,000 48,000,000 4,000,000 1,440,000 5,440,000 21,040,000 44,000,000 44,000,000 4,000,000 1,320,000 5,320,000 40,000,000 40,000,000 4,000,000 1,200,000 5,200,000 36,000,000 36,000,000 4,000,000 1,080,000 5,080,000 32,000,000 32,000,000 4,000,000 960,000 4,960,000 19,120,000 28,000,000 28,000,000 4,000,000 840,000 4,840,000 24,000,000 24,000,000 4,000,000 720,000 4,720,000 20,000,000 20,000,000 4,000,000 600,000 4,600,000 16,000,000 16,000,000 4,000,000 480,000 4,480,000 17 ,200,000 12,000,000 12,000,000 4,000,000 360,000 4,360,000 8,000,000 8,000,000 4,000,000 240,000 4,240,000 4,000,000 4,000,000 4,000,000 120,000 4,120,000 Notes Debt of VND80,000,000 from bank, maturity of 5 years, interest rate 12% Interest is paid in from the first month, principal payment is incurred once a quarter Wages paymentJob title 1 Director 2 Secretary 3 Accountant 4 Sales Assistant 5 Cooking teacher 6 Securities Total Quantity 1 1 1 6 2 2 WAGE PAYMENTS (VND) Year 1 Year 2 72,000,000 75,600,000 42,000,000 44,100,000 48,000,000 50,400,000 144,000,000 151,200,000 96,000,000 100,800,000 48,000,000 50,400,000 450,000,000 472,500,000 Year 3 79,380,000 46,305,000 52,920,000 158,760,000 105,840,000 52,920,000 496,125,000 Year 4 83,349,000 48,620,250 55,566,000 166,698,000 111,132,000 55,566,000 520,931,250 Year 5 87,516,450 51,051,263 58,344,300 175,032,900 116,688,600 58,344,300 546,977,813 Notes 1. Wages of Director, Secretary, Accountant, Sales Assistant, Securities are inclu ded in Selling and Admin Fixed expense each year 2. Wages of cooking teacher is included as Direct Labor for Learning Services 3. Wages growth rate is 5% each year Variable costWe have three services in this project, in general, to estimate the variable cost, we estimate the variable cost beyond the number of customers we service. Services Included Shopping DIY Learning Bag Tool packgage 1 Tools package 2 Ingridients Using CPs kitchen Using CPs tools Teacher Services Included Bag Tool package 1 Tool package 2 Ingridients Using CPs kitchen (gas, water, electricity cost,) Using CPs kitchen s tools Teacher Total VARIABLE COST PER CUSTOMER Shopping DIY 500 3,500 Learning 500 3,500 15,000 3,000 10,000 500 3,500 15,000 50,000 3,000 10,000 50,000 132,000 4,000 32,000 Fixed cost per year for Selling and Admin activitiesFIXED COST PER YEAR FOR ADMINSTRATIVE & SELLING ACTIVITIES Detail Per month Per year Internet bill 250,000 3,000,000 Electricity bill 1,500,000 18,000,000 Water bill 200,000 2,400,000 Phoning bill 200,000 2,400,000 Advertising exp 6,000,000 Other exp 1,000,000 12,000,000 43,800,000 Expected number of customers year 1 Shopping DIY Learning Total EXPECTED NUMBER OF CUSTOMER year 2 year 3 year 4 3500 4550 5460 2920 3796 4555 768 998 1198. 1 7,188 9,344 11,213 year 5 5733 4783 1258 11,774 6020 5022 1321 12,363 We assume that because this is a new services which havent existed in the market so it will have a numerous of customers The growth rate will be 30%, 10% and 5% for the year of 2, 3, 4 and 5 respectively , after the services enter the market. Total expenseYear 0 Total Variable costs Shopping DIY Learning Total Fixed costs Wages Depreciation House Renting Fixed cost of selling and admin Intersest payment Total cost TOTAL EXPENSE Year 1 Year 2 Year 3 Year 4 Year 5 208,816,000 271,460,800 325,752,960 342,040,608 14,000,000 18,200,000 21,840,000 22,932,000 93,440,000 121,472,000 145,766,400 153,054,720 101,376,000 131,788,800 158,146,560 166,053,888 512,3 80,000 354,000,000 29,700,000 60,000,000 43,800,000 24,880,000 721,196,000 528,160,000 371,700,000 29,700,000 60,000,000 43,800,000 22,960,000 799,620,800 544,825,000 390,285,000 29,700,000 60,000,000 43,800,000 21,040,000 870,577,960 562,419,250 409,799,250 29,700,000 60,000,000 43,800,000 19,120,000 904,459,858 359,142,638 24,078,600 160,707,456 174,356,582 580,989,213 430,289,213 29,700,000 60,000,000 43,800,000 17,200,000 940,131,851 Price of each servicesCustomer Year 1 Shopping DIY Learning Year 2 Shopping DIY Learning Year 3 Shopping DIY Learning Year 4 Shopping DIY Learning Year 5 Shopping DIY Learning 3,500 2,920 768 4,550 3,796 998 5,460 4,555 1,198 5,733 4,783 1,258 6,020 5,022 1,321 Variable Cost 14,000,000 93,440,000 101,376,000 18,200,000 121,472,000 131,788,800 21,840,000 145,766,400 158,146,560 22,932,000 153,054,720 166,053,888 24,078,600 160,707,456 174,356,582 Fixed cost Toatal cost Cost per customer Average cost in 5 year 512,380,000 51,238,000 65,238,000 18,639 15,138 230,571,000 324,011,000 110,963 92,074 230,571,000 331,947,000 432,223 360,406 528,160,000 52,816,000 71,016,000 15,608 237,672,000 359,144,000 94,611 237,672,000 369,460,800 370,053 544,825,000 54,482,500 76,322,500 13,978 245,171,250 390,937,650 85,822 245,171,250 403,317,810 336,637 562,419,250 56,241,925 79,173,925 13,810 253,088,663 406,143,383 84,915 253,088,663 419,142,551 333,186 580,989,213 58,098,921 82,177,521 13,652 261,445,146 422,152,602 84,059 261,445,146 435,801,728 329,932 Shopping DIY Learning Original Cost plus 1% Final Price Note We calculate the total cost of a service and base on it to estimate the price 15,289 17,000 For the Shopping services, the price is the average profit we gain from each shopping bill 92,995 120,000Assume that the shop dont have inventory because the goods are directly taken from agent 364,010 400,000 Revenue PlanYear 0 Shopping Customer Profit/bill DIY Customer Price Learning Customer Price Total Growth rate of revenue (%) Year 1 EXPECTED REVENUE Year 2 Year 3 Year 4 Year 5 59,500,000 77,350,000 92,820,000 97,461,000 102,334,050 3,500 4,550 5,460 5,733 6,020 17,000 17,000 17,000 17,000 17,000 350,400,000 455,520,000 546,624,000 573,955,200 602,652,960 2,920 3,796 4,555 4,783 5,022 120,000 120,000 120,000 120,000 120,000 307,200,000 399,360,000 479,232,000 503,193,600 528,353,280 768 998 1,198 1,258 1,321 400,000 400,000 400,000 400,000 400,000 717,100,000 932,230,000 1,118,676,000 1,174,609,800 1,233,340,290 30 20 5 5 Because this is a completely new services, so after the first year, the number of customers increase sharply in the 2nd and 3rd year, but in the 4th and 5th year when Cake paradise (C has the competitor, ( who enter the market to join this segment), the growth rate of CP increase slightly at 5%. Profit & Loss PlanYear 1 Revenue Variable Cost Contribute Margin Fixed Cost Earning before Tax Tax Earning after tax PROFIT AND LOSS PLAN Year 2 Year 3 Year 4 Year 5 717,100,000 932,230,000 1,118,676,00 0 1,174,609,800 1,233,340,290 208,816,000 271,460,800 325,752,960 342,040,608 359,142,638 508,284,000 660,769,200 792,923,040 832,569,192 874,197,652 512,380,000 528,160,000 544,825,000 562,419,250 580,989,213 (4,096,000) 132,609,200 248,098,040 270,149,942 293,208,439 28% 28% 28% 28% 28% (4,096,000) 95,478,624 178,630,589 194,507,958 211,110,076 We can see that in the first year, because this is a new service and it needs time for the customers to know and have the habit to use this service, so the earning after tax for the first year is negative. After the first year,the number of customers who know and use Cake Paradise service increase (beyond word of mouth), the earning after tax for the 2nd, 3rd, 4th, 5th increase sharply. Break even for each yearYear 1 CM CM unit CM Ratio Break even point Break even revenue Safety of margin 508,284,000 70712. 9 0. 7088 7,246 722,878,741 (5,778,741) BREAK EVEN Year 2 Year 3 Year 4 Year 5 660,769,200 792,923,040 832,569,192 874,197,652 70712. 9 70712. 9 70712. 9 70712. 9 0. 7088 0. 7088 0. 7088 0. 7088 7,469 7,705 7,954 8,216 745,141,567 768,652,973 793,475,388 819,674,364 187,088,433 350,023,027 381,134,412 413,665,926 Cash flow We have, cost of capital was calculated by WACC assumption ( ( ) ) Year 0 Revenue Operating Expense EBITDA D&A EBIT (1- Tax) NOPAT CFOP Capital expense Working capital Add W. C Free Cash flow Payback Period Cost of capital NPV IRR MIRRCASH FLOW Year 1 Year 2 Year 3 Year 4 Year 5 717,100,000 932,230,000 1,118,676,000 1,174,609,800 1,233,340,290 691,496,000 769,920,800 840,877,960 874,759,858 910,431,851 25,604,000 162,309,200 277,798,040 299,849,942 322,908,439 29,700,000 29,700,000 29,700,000 29,700,000 29,700,000 (4,096,000) 132,609,200 248,098,040 270,149,942 293,208,439 0. 72 0. 72 0. 72 0. 72 0. 72 (4,096,000) 95,478,624 178,630,589 194,507,958 211,110,076 25,604,000 125,178,624 208,330,589 224,207,958 240,810,076 (148,500,000) (45,000,000) (193,500,000) 2. 5 15. 30% 277,726,609 54% 30. 39% ( 45,000,000) 25,604,000 (58,500,000) (13,500,000) 111,678,624 (70,200,000) (11,700,000) 196,630,589 (73,710,000) (3,510,000) 220,697,958 (77,395,500) (3,685,500) 314,520,076 The Payback Period isConclusion 1. 2. 3. 4. The project completely has the ability of reaching the break-even point from the first year. Payback period is nearly 2. 5 years, a very appropriate period in the whole process of 5 years. NPV is a positive numbers and IRR is at 54%, much more higher than the cost of capital. MIRR is at 30. 39%, a high figure. ? Although the initial investment is quite small, all the figures above have proved that this project is profitable and promises to bring high profit. Reference Fundamental of corporate financial Book Vatgia. vn Kitchenart. wordpress. com Nguyenkim. vn Special thank to Ms. Pham Lien Ha to helps us to do this project